Latest News Debt Relief and Secured vs Unsecured Debt

Debt Relief and Secured vs Unsecured Debt

Debt Relief and Secured vs Unsecured Debt: As much as lenders come through for you when you need financial resources for numerous projects or cover some expenses, they can be frustrating when you have trouble repaying. Understanding what debt relief is and the available debt relief options is crucial if you are stuck with huge debts that are denying you peace. 

For better debt negotiation outcomes, you should hire professionals from a reliable debt relief company to negotiate for lower interest rates, extension of the due date, deferring of monthly payments, and waivers on late fees. The loans can be unsecured or secured with different examples and eligibility requirements. 

When you experience difficulties in repaying the loan, your stress levels might go up causing you mental issues that might be costly to treat. You will have to hire the best debt relief company that will find better options to help clear your debt fully or partially. Understanding debt relief is vital to know the steps to reduce the loan burden. 

Debt Relief

Debt relief involves reorganizing your loan into ways that make it easy for you to repay. It is a measure that requires you to find a win-win solution for you and the creditor.

Debt Relief Options

Getting the best loan repayment options that fit your financial situation might require the help of a professional from a reputable debt relief company. The expert applies knowledge of the financial and legal policies to find you financial freedom. 

The debt relief options are settlement and negotiation at Even if you think you have the skills to negotiate, you might be better off letting professionals handle debt negotiations on your behalf. They will help you navigate the loan relief strategies and pinpoint the one that suits your financial situation. Some of the debt relief choices that require negotiations are: 

  • Lower Interest Rates 

Loans accumulate interests either monthly or annually, which makes them costly. You should review the interest rates a lending institution offers to gauge if the debt is reasonable or not. Taking a loan with abnormally high-interest rates is not financially wise. Once you have a loan, repayment is never an option. The debt relief professionals from Freedom Debt Relief can negotiate with your lenders for lower interest rates on unsecured loans. 

  • Extension of the Due Date

If you find it hard to raise the monthly payments for your loan, you can get in trouble with your creditors. They can send your name for listing in the credit bureaus or hire debt collectors to cause you sleepless nights. It is wise for the financial experts from the debt relief company you hire to request an extension of the due date. This will give you time to rearrange your finances or find other avenues to find money to repay your loan in a relaxed manner. The debt relief company can negotiate with the creditors to lower your monthly installment payments for the option to work. 

  • Defer Monthly Payments

It might seem like a cliché idea, but lenders can allow debtors to defer payments after their debt relief expert explains their financial situation. You might have lost your job during the devastating outbreak of covid-19, incurred tremendous losses that left you bankrupt, or lost everything to a fire breakout. Such situations can help your debt relief program negotiate for a reasonable time for you to get back on your feet to continue with the repayments. The deferred payments do not attract penalties that can increase your debt burden. For instance, most credit card companies such as Chase Bank, American Express, and Apple have come out to allow cardholders with financial difficulties due to coronavirus to defer some monthly payments. 

  • Late Fees Waiver

Whenever you fail to pay your monthly payments, you will incur late fees in your loan balance. The debt amount can accumulate to a higher amount becoming too expensive to repay. 

The debt relief company can also help you find financial freedom by requesting your lenders remove the late fees. The professionals can help negotiate for the waiver of penalties if you are considering debt settlement. Settling debt is an effective option that companies, including Freedom Debt Relief, recommend. It involves saving enough cash to achieve your goal. The saving process might take months or longer than a year to get the amount ready, but with discipline and determination, you will get there. 

When you are ready to offset your loan, your debt relief expert can request your creditors waive the accumulated penalties. Removing the late fees will reduce your loan balance, making you pay a lesser amount.

Unsecured and Secured Debts

You can qualify for debt relief for many unsecured loans, secured debts are another story however. 

  • Secured Loans

People with secured debts have valuable assets such as cars, land, or houses tied to the loan. When they fail to repay the debt, the creditor sells the collateral asset to cover the debt. Creditors give secured loans to clients that want large loans. The debtors enjoy lower interest rates to the unsecured debts because they are less risky. However, if your credit scores are lower, you will get secured personal loans at higher interest rates. 

The most common types of secured loans that debt relief companies cannot negotiate include:

  • Vehicle
  • Mortgage
  • Secured credit cards
  • Home loans
  • Utility bills
  • Federal student debts
  • Unsecured Loans

Unsecured loans are different from secured debts because of the zero collateral requirements. They are riskier and attract higher interest rates because the debtors might fail to repay the amounts, leaving the lending company at a loss. That is why most credit institutions use credit collectors to get their money back from defaulting clients. Examples of loans without security backing are: 

  • Credit card loans
  • Personal debts
  • Private student loans 
  • Vacation or festival debts
  • Consolidated loans
  • Weddings

Eligibility for Unsecured Loans

Applying for a loan is a process that requires you to convince lenders that you will be able to repay the cash once they lend it to you under specific conditions. The creditors will check for the following requirements to gauge your ability to repay their loan.

  • Creditworthiness

Credit bureaus help lenders determine who to lend to and the interest rates to charge. The bureau has a list of defaulters and those in the gold list (People that repay on time). 

  • Credit scores

If your credit ratings are high, you will get loans at fair interest rates, which is the opposite for those with lower ratings. 

  • Debt-to-income ratio

Lenders of unsecured loans use your income to gauge the amount they will lend you. If your income is high, you might qualify for handsome loans available. 

If debts deny you peaceful nights, you should hire Freedom Debt Relief. The company has experienced professionals who will explain debt relief for you to understand. The experts will also find debt relief options for your unsecured or secured loans.

They will negotiate with your lenders to get lower interest rates and an extension of the due date of payments. The experts can also request for deferring of monthly installments or late fees waiver. Professionals at Freedom Debt Relief will ensure you get ways to repay your unsecured and secured loans stress-free.

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